Grayscale has formally moved to bring Hyperliquid’s native token, HYPE, into the U.S. exchange-traded fund market. In a preliminary Form S-1 filing submitted to the U.S. Securities and Exchange Commission on March 20, the digital asset manager proposed the Grayscale HYPE ETF, a spot product designed to track the market price of HYPE.
The filing places Grayscale into an increasingly competitive race around Hyperliquid-linked investment vehicles. The firm had already registered the Grayscale HYPE Trust in Delaware in January, and now joins other issuers including Bitwise and 21Shares, both of which have also pursued filings connected to the Hyperliquid ecosystem.
A Spot Structure Focused on Direct Token Exposure
According to the filing, the proposed ETF would use a passive grantor trust structure and would hold HYPE directly. That design is meant to give investors exposure to the token’s spot price without relying on leverage, futures, swaps, or other derivatives-based mechanisms. If approved, the fund is expected to list on Nasdaq under the ticker GHYP.
Grayscale’s operational setup follows a familiar institutional template. Coinbase Custody is named as the custodian for the digital assets, while Bank of New York Mellon would oversee administrative responsibilities. The fund’s net asset value would be calculated daily using the Coindesk Hyperliquid Benchmark Extended Rate, with pricing fixed at 4 p.m. New York time.
This detail matters because benchmark selection, pricing methodology, and custody design have become central points in crypto ETF reviews. By specifying a regulated listing venue, a major custodian, and a daily benchmark process, Grayscale appears to be positioning the product in a format U.S. regulators and traditional investors can more easily evaluate.
Staking Excluded for Now
One of the more notable elements of the filing is what it does not include. Unlike some other crypto fund proposals that attempt to incorporate staking rewards, Grayscale’s HYPE ETF would not initially participate in staking. The company said staking could potentially be added in the future if tax treatment and related conditions become more favorable, but the trust would launch without that feature if approved.
That conservative approach may reflect the broader regulatory and tax uncertainty surrounding staking in U.S.-listed investment products. By removing that element from the initial structure, Grayscale may be trying to simplify the product review process and reduce one potential source of friction with regulators.
Why Hyperliquid Is Drawing ETF Interest
Hyperliquid has established a distinct position within decentralized finance by focusing on fully onchain perpetual futures trading. Built as a purpose-driven Layer 1 blockchain, the network combines its HyperCore trading engine with an EVM-compatible environment. This allows developers to build applications while offering traders deep liquidity and execution speeds designed to resemble the user experience of centralized exchanges.
Data cited in the filing indicates that Hyperliquid routinely processes billions of dollars in daily volume, while open interest has also remained in the multi-billion-dollar range. The project has carved out a meaningful share of the decentralized perpetuals market, helping explain why issuers now see HYPE as a candidate for broader capital markets products.
For investors and product sponsors, this is an important distinction. Hyperliquid is not being pitched simply as another narrative-driven token. Instead, the filing frames the asset as one tied to an active piece of DeFi infrastructure where trading activity, liquidity, and usage metrics help support the investment case.
The Role of HYPE in the Network
HYPE serves multiple functions across the Hyperliquid ecosystem. The token is used in governance and staking, and the filing also notes that it captures value from network activity through mechanisms tied to trading fees, including buyback and burn processes that can reduce circulating supply over time.
That multi-role design is relevant to the ETF proposal because it helps define why the token has economic significance inside the protocol itself. In other words, Grayscale is not just seeking exposure to a tradable crypto asset, but to a token that sits at the center of a functioning DeFi venue with measurable market activity.
Risks Remain Front and Center
Despite the product’s institutional framing, the filing highlights several major risks. These include price volatility, regulatory uncertainty, wallet concentration, and network-level threats. One of the most important legal concerns is the possibility that HYPE could eventually be classified as a security, which could significantly disrupt or even prevent the ETF from operating as planned.
Those disclosures underscore the reality that crypto ETF expansion beyond bitcoin and ether still faces complex legal and market questions. Tokens tied to DeFi protocols may offer strong utility and ecosystem relevance, but they also introduce additional layers of scrutiny around token design, decentralization, governance, and market structure.
Still an Early-Stage Application
For now, the Grayscale HYPE ETF remains in the early stages of the approval process. The filing alone does not mean a launch is imminent. Before the product can begin trading, it would still need both SEC effectiveness and exchange rule approval, a process that can take months and does not guarantee a final green light.
Even so, the proposal is significant. If approved, it would represent another step in Wall Street’s move beyond bitcoin and ether toward more specialized, DeFi-native infrastructure assets. That shift suggests the market for crypto investment products is broadening from the largest legacy tokens to protocols with more targeted use cases and stronger links to onchain trading activity.
Whether or not Grayscale’s filing succeeds, the application itself signals that Hyperliquid and its native token are now being taken seriously in mainstream financial product design. And as more issuers line up with competing structures, the race to package emerging DeFi assets for public-market investors is likely to intensify.